Cyrus Mistry's conduct caused harm to TCS, stakeholders: Tata Sons

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Upping the ante, Tata Sons accused estranged chairman Cyrus Mistry of causing "enormous harm" toTata Consultancy Services (TCS) by his conduct and sought his removal from thecompany's board.

In a notice to shareholders seeking his removal, circulated byIndia's largest software exporter, its main promoter Tata Sons said Mistry has"lost confidence". Tata Sons, also a holding company of the USD103-billion Tata Group, cited benefits accruing to TCS from use of 'Tata' brandby Ratan Tata-led Tata Sons to back its recommendation for Mistry's removal.

Within weeks of Ratan Tata replacing Mistry as Chairman of the holding companyof the group, Tata Sons by virtue of its commanding 73.26 per cent stake in TCSremoved him as the chairman. It also asked the company to convene anextraordinary general meeting (EGM) of shareholders to consider removing him asa director on the board.

At its board meeting last week, which was not attendedby Mistry, TCS decided to call an EGM on December 13. The notice said,"Subsequent to his replacement as Executive Chairman of Tata Sons Ltd(TSL), Mistry has made certain unsubstantiated allegations, which castaspersions not only on TSL and its board of directors, but also on the Tatagroup as a whole, of which TCS is an integral part."

Stating that thecommunication marked as confidential "was made public", it added,"Mistry's conduct has caused enormous harm to the Tata Group, TCS and itsstakeholders, including employees and shareholders."

The move by Tata Sonsto replace Mistry with group veteran Ishaat Hussain as chairman of TCS was seenas an attempt by Ratan Tata-led promoter group to tighten grip over the salt-to-software conglomerate. "The board of directors of the company is inagreement with... the removal of Cyrus P Mistry as director of the company, asthe same would be in the best interests of the company," the notice said.

"The board of directors of Tata Sons, the holding company of the TataGroup, has "lost confidence in Cyrus P Mistry to lead Tata Sons for acombination of several factors," it said, adding that Tata Sons on October24 decided to replace him as the removal "was absolutely necessary for thefuture success of the Tata Group".